Vote on account: All you need to know

A sanction of Parliament for withdrawal of money from the Consolidated Fund of India to meet the government`s expenses is known as a Vote-on-account.

Zee Media Bureau

New Delhi: The United Progressive Alliance (UPA) government will seek a vote on account to meet its expenses for the few months before India goes to polls this year.

Technically, a sanction of Parliament for withdrawal of money from the Consolidated Fund of India to meet the government`s expenses is known as a Vote-on-account.

The government would seek a vote on account because Parliament will not be able to vote on the entire Budget before the commencement of the new financial year, starting April, due to general elections. A fresh budget would be brought before Parliament by the government that comes to power.

The government usually goes for Vote-on-account in two situations. First, when the government is unable to pass a full Budget in Parliament for some reason before March 31, which is when the financial year ends. Second, when the term of the incumbent government ends close to March 31. The present government will seek a Vote-on-account, as its term ends in May, two months later.

A full fledged Budget has to go through multiple stages including the general discussion, discussion on Demands for Grants of various Ministries/Departments, Appropriation Bill and Finance Bill. All this can take a long time. It becomes imperative that funds are made available to the government for functioning in the meantime; otherwise no financial resources will be available for the expenditure of various Ministries in the next fiscal.

In order to avoid such an emergency, through a special provision, Government obtains the vote of Parliament for a sum sufficient for its expenditure on various items for a part of the year - thus avoiding a crisis.

A Vote-on-account is different from both interim and full Budget as it deals only with expenditure, while interim and complete Budgets deal with both expenditure and receipts.

Normally, a Vote-on-account is taken for two months only. But in an election year or when it is anticipated that the main Demands and Appropriation Bill will take longer than two months, the Vote-on-account may cover a period exceeding two months. Typically this period does not exceed six months, as that is the maximum gap possible between two sittings of Parliament.

Vote-on-account is also sometimes exploited by political parties to announce sops before the polls, though it does not allow for the altering or introducing of new duties and taxes.

The National Democratic Alliance Government before its dissolution in 2004 Lok Sabha elections had announced a series of concessions and tax reliefs on the eve of the Vote-on-account. The obvious intention of the NDA Government was to gain some mileage on the eve of the next general election.

In 1991, the then Finance Minister Yashwant Sinha, in the Chandra Shekhar government, while presenting a Vote-on account had announced plans to divest government equity in public sector undertakings.

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